1 DE AGOSTO DE 1997

1340-(241)

existing global or regional development institutions which have the infrastructure and expertise to carry out such assistance programmes; d) The extent and period of such assistance shall be determined on a case-by-case basis. In doing so, due consideration shall be given to the nature and magnitude of the problems encountered by affected developing land-based producer States.

2 — Article 151, paragraph 10, of the Convention shall be implemented by means of measures of economic assistance referred to in paragraph 1. Article 160, paragraph 2, /), article 162, paragraph 2, n), article 164, paragraph 2, d), article 171, subparagraph/), and article 173, paragraph 2, c), of the Convention shall be interpreted accordingly.

SECTION 8 Financial terms of contracts'

1 — The following principles shall provide the basis for establishing rules, regulations and procedures for financial terms of contracts:

a) The system of payments to the Authority shall b&fair both to the contractor and to the Authority and shall provide adequate means of determining compliance by the contractor with such system;

b) The rates of payments under the system shall be within the rang of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep sea-bed miners an artificial competitive advantage or imposing on them a competitive disadvantage;

c) The system should not be complicated and should not impose major administrative costs on the Authority or on a contractor. Consideration should be given to the adoption of a royalty system or a combination of a royalty and profit-sharing system. If alternative systems are decided upon, the contractor has the right to choose the system applicable to its contract. Any subsequent change in choice between alternative systems, however, shall be made by agreement between the Authority and the contractor;

d) An annual fixed fee shall be payable from the date of commencement of commercial production. This fee may be credited against other payments due under the system adopted in accordance with subparagraph c). The amount of the fee shall be established by the Council;

e) The system of payments may be revised periodically in the light of changing circumstances. Any changes shall be applied in a non-discriminatory manner. Such changes may apply to existing contracts only at the election of the contractor. Any subsequent change in choice between alternative systems shall be made by agreement between the Authority and the contractor;

f) Disputes concerning the interpretation or application of the rules and regulations based on these principles shall be subject to the dispute settlement procedures set out in the Convention.

2 — The provision of annex in, article 13, paragraphs 3 to 10, of the Convention shall not apply.

3 — With regard to the implementation of annex m, article 13, paragraph 2, of the Convention, the fee for processing applications for approval of a plan of work limited to one phase, either the exploration phase or the exploitation phase, shall be US$ 250,000.

SECTION 9 The Finance Committee

1 — There is hereby established a Finance Committee. The Committee shall be composed of 15 members with appropriate qualifications relevant to financial matters. States Parties shall nominate candidates of the highest standards of competence and integrity.

2 — No two members of the Finance Committee shall be nationals of the same State Party.

3 — Members of the Finance Committee shall be elected by the Assembly and due account shall be taken of the need for equitable geographical distribution and the representation of special interests. Each group of States referred to in section 3, paragraph 15, a), b), c) and d), of this annex shall be represented on the Committee by at least one member. Until the Authority has sufficient funds other than assessed contributions to meet its administrative expenses, the membership of the Committee shall include representatives of the five largest financial contributors to the administrative budget of the Authority. Thereafter, the election of one member from each group shall be on the basis of nomination by the members of the respective group, without prejudice to the possibility of further members being elected from each group.

4 — Members of the Finance Committee shall hold office for a term of five years. They shall be eligible for re-election for a further term.

5 — In the event of the death, incapacity or resignation of a member of the Finance Committee prior to the expiration of the term of office, the Assembly shall elect for the remainder of the term a member from the same geographical region or group of States.

6 — Members of the Finance Committee shall have no financial interest in any activity relating to matters upon which the Committee has the responsibility to make recommendations. They shall not disclose, even after the termination of their functions, any confidential information coming to their knowledge by reason of their duties for the Authority.

7 — Decisions by the Assembly and the Council on the following issues shall take into account recommendations of the Finance Committee:

a) Draft financial rules, regulations and procedures of the organs of the Authority and the financial management and internal financial administration of the Authority;

¿>) Assessment of contributions of members to the administrative budget of the Authority in accordance with article 160, paragraph 2, e), of the Convention;

c) All relevant financial matters, including the proposed annual budget prepared by the Secretary-General of the Authority in accordance with article 172 of the Convention and the financial aspects of the implementation of the programmes of work of the Secretariat;

d) The administrative budget;